A First Republic bank branch in Manhattan on April 24, 2023 in New York City.
Spencer Platt | beautiful pictures
US regulators have asked banks to provide the best and final takeover offers for First Republic on Sunday afternoon, in a move that authorities hope will calm markets and weather a period of uncertainty for lenders in the region.
JPMorgan Chase And PNC are likely to be bidders for the ailing lender, who will have their takeover forfeited and immediately sold to the winning bank, according to people with knowledge of the situation. The Wall Street Journal reported those banks’ interest rates late Friday.
Other companies are likely to step up. american bank is among other organizations weighing potential bids for the First Republic, according to people with knowledge of the matter.
If regulators led by the Federal Deposit Insurance Corporation receive an acceptable offer by Sunday, it is possible that the new owners of the First Republic could be announced as early as Sunday. Monday. That scenario would be the least disruptive for First Republic customers, who will start the week knowing their bank is now owned by a financially stable operator.
The auction of the First Republic could end a tumultuous period for mid-sized US banks. Since the defeat of Silicon Valley Bank in March, attention turned to the First Republic as the weakest link in the American banking system. The bank’s shares fell 90% last month, and then fell further this week after the First Republic revealed how dire its situation was.
Like SVB, which caters to the tech startup community, First Republic is also a specialty lender based in California. It focused on serving wealthy coastal Americans, enticing them with low-interest mortgages in exchange for cash deposits at the bank. That pattern unraveled after the collapse of SVB, when First Republic customers withdrew more than $100 billion in deposits, the bank disclosure Monday.
As First Republic’s situation worsened, regulators initially cast their nets wide, asking a large group of banks how much they thought the company was worth, according to one person with knowledge of the matter. about this process. That group has shrunk in recent days, with the idea that regulators would share the information needed to make final bids only with the top contenders.
Acquisitions make the most sense for organizations looking to grow among the coastal rich; Branches of the First Republic are concentrated in California, New York, Boston, and Florida.
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